Sequoia Cap, Norwest Venture invest in start-ups

BANGALORE: The rising tide of venture capital for technology start-ups got a further boost on Wednesday with two new deals from marquee investment firms Sequoia Capital and Norwest Venture Partners.

Manthan Systems, a data analytics firm, raised $15 million from Norwest Venture, its third round of funding that it plans to use for research, marketing and new acquisitions in a sector pegged to be the next big outsourcing opportunity from India.

In December, Mu Sigma, another data analytics firm, raised $108 million ( 580 crore) from General Atlantic and Sequoia Capital.

"The deal closing scene is very strong, around 30 private equity deals were finalised in January alone," Harish HV a partner at Grant Thornton India, a financial advisory and auditing firm, said.

In its fifth deal announcement this year Sequoia Capital, which is on a high-pitch investment spree, has put in $ 7.5 million in training and certification company Edusys.

"We have successful investment in the education space including in Tutor Vista but this is our first deal in the test and certification space," GV Ravishankar a managing director at Sequoia Capital said.

This is the first round of funding for the six-year-old firm that already works with 3,500 companies across 150 countries.

"We offer customers a choice they can train at offline centres or opt for tutors online this flexible model is a huge advantage" Tridibesh Satpathy, chief executive officer, Edusys, said. He founded the company with personal savings of 3 lakh and has since run the business form profits generated from the first year itself. "The test prep and certification market is a $48 billion global industry which offers tremendous scope for growth|", he added.

For Manthan Systems, whose customers include global retailers such as McDonald's, Crocs, Robinsons, Haggen and Woolworth demand for specialised services is growing fast. "With markets facing tough times worldwide, retailers are harnessing and profiting from the power of analytics to make better and faster decisions", Atul Jalan, founder said, His firm analyses consumer behaviour to predict future trends for large retailers. With this round of funding the total capital raised by Manthan, adds up to $50 million. Earlier investors include IDG Ventures and FIL Capital Advisors, Fidelity India's' private equity arm.

Norwest Venture recorded its third deal in the data analytics space with the latest investment. It has earlier backed companies such as1010data and The Retail Equation

Mohan Kumar, Executive Director, NVP India, expects to earn a five-fold return on his fund's investment in Manthan. "The data analytics space which was long controlled by big vendors such as IBM and Oracle is throwing up opportunities for niche technology players like Manthan," he said. PE firms invested $10 billion across 441 deals in India last year 2011, according to research firm Venture Intelligence.